Bitcoin drops to $61,626 as 200-week SMA test revives bear-market fears

Bitcoin has returned to the 200-week moving average for the first time since October 2023, a level that defined the 2022 bear market and now tests whether bulls can hold the line.

Bitcoin fell 7.2% to $62,500 on June 4, touching its 200-week simple moving average of $61,626 for the first time since October 2023. The 200-week SMA previously acted as resistance throughout the 2022 bear market before bulls regained control, according to TradingView data.

"My guess is BTC has a decent chance of bouncing soon as it's been dropping pretty steeply. But honestly it's anyone's guess in the short term," CollinTalksCrypto, creator of the social media channel of the same name, said.

The daily relative strength index dropped to 17.35, its lowest since 2020, TradingView data shows. Bitcoin has now fallen 15.8% from the breakdown of a large bear flag pattern, with the price briefly dipping to $61,300 before recovering to near $64,000. The 24-hour trading volume surged as the sell-off accelerated, with CoinGecko data showing elevated activity across spot and derivatives markets.

A failure to hold the 200-week SMA could open the door to a drop below $60,000. CryptoQuant CEO Ki Young Ju identified the average cost basis of $53,000 as the next major floor, describing the current phase as "a massive change of hands." He noted that prices have returned to early-2024 levels despite significant institutional inflows through spot ETFs, pointing to "immense volume of spot distribution from older holders."

Oversold readings fuel debate on near-term direction

The extreme RSI reading has divided analysts on whether a relief bounce or further downside is more likely. Frank A. Fetter, an X analytics account, said BTC/USD was "pretty much the most oversold ever." Crypto trader Michaël van de Poppe called the area one to "accumulate your positions, if you have a strong thesis on Bitcoin from here."

Van de Poppe also flagged ongoing questions over Strategy's corporate debt as a factor in short-term price trajectory, adding that the STRC depeg would need to reverse for Bitcoin to bounce. "If there's a constant, continuous downward trend here, we'll most likely see sub-$60,000 in the markets," he said.

Legendary chartist Peter Brandt offered a more bearish outlook, stating he does not see a tradable low until October and warning of a possible "terminal wash-out." Bitcoin is now trading below the peak it first reached in April 2021, meaning investors who bought at that level have seen a negative total return over five years, according to gold bug Peter Schiff.

The 200-week SMA has only ever increased with time and currently sits at $61,626. During the 2022 bear market, the trend line functioned as resistance until October 2023, when bulls finally pushed price above it. The question now is whether history repeats — or whether this time the level breaks, sending Bitcoin toward the $53,000 realized price that CryptoQuant identifies as the ultimate bear-market floor.

This article is for informational purposes only and does not constitute investment advice.